Tax books. Records kept by a firm's management that follow IRS rules. The books follow Financial Accounting Standards Board rules.

The Internal Revenue Service (IRS) Data Book is published annually by the IRS and contains statistical tables and organizational information on a fiscal year basis. The report provides data on collecting the revenue, issuing refunds, enforcing the law, assisting the taxpayer, and the budget and workforce.

A book-to-tax reconciliation is the act of reconciling the net income on the books to the income reported on the tax return by adding and subtracting the non-tax items. In performing a book-to-tax reconciliation, you must identify those items of income and deduction which differ from book to tax.

M-1 adjustments: reconciliation of book and taxable income (income and deductions.) Differences exist because of the difference in GAAP and tax law.